Jan 2, 2024 - Business

These five companies can't afford a misstep in 2024

Illustration: Aïda Amer/Axios

Like many of us, some companies' New Year's resolutions are pretty simple: to make it to the next new year in tact.

Why it matters: Although the U.S. economy looks poised to avoid a hard landing in 2024, a slew of businesses face potentially existential troubles of their own.

Threat level: Business bankruptcies were up 30% in the 12-month period ending Sept. 30, according to the federal court system, as spiking interest rates dragged down many wobbling companies.

  • Bankruptcy court ensnared companies like WeWork and Bed Bath & Beyond — the former of which has survived so far, the latter of which did not.

Looking ahead, here are five companies that can't afford a misstep in 2024:

  • Rite Aid: The nation's third largest drugstore chain filed for bankruptcy protection in October and faces an uphill climb as it attempts to compete with CVS and Walgreens.
  • Cruise: GM's self-driving car division is embroiled in a safety crisis that has led the company to suspend driverless operations.
  • JoAnn: The indebted arts-and-crafts retailer's stock plunged from about $3 at the beginning of 2023 to less than 50 cents at the end. With sales declining, the fabrics company had $1.15 billion in long-term debt and only $28 million in cash as of Oct. 28.
  • SunPower: The rooftop solar panel installer warned in December that there's a "substantial" risk it won't make it as a standalone entity. The company is reeling from a slowdown in sales connected to the rise in interest rates.
  • Nikola: The hydrogen electric truck maker is still trying to regain its footing after the downfall of its founder, Trevor Milton, who was sentenced last month to four years in prison on federal fraud charges.

What we're watching: A decline in interest rates could help give many companies the breathing room they need to make it through the year.

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